It is important for federal regulated employers to be aware of the newly introduced administrative monetary penalties under Part IV of the Canada Labour Code (“Code”). The changes came into force on January 1, 2021 and have served as a financial deterrent to the issue of frequent non-compliance by some employers.

In this blog, we will introduce to you what are these changes and their impacts on federally regulated employers.

 Monetary Penalty System to Deter Non-Compliance

The new administrative monetary penalties work as a penalty system to address concerns of frequent non-compliance with the Code and related regulations.

a) Fines

As part of the enforcement and compliance mechanism, any federal regulated employers that violate Part II (Occupational Health and Safety) and Part III (Standard Hours, Wages, Vacations and Holidays) of the Code will be subject to administrative monetary penalties up to $250,000.

b) The Add-Up Effect

Further, if the issuance of an administrative monetary penalty does not help to deter the non-compliance of the employer, the Labour Program reserves the right to issue a new penalty for the violation each day. In this way, the total amount of the penalties can add up quickly.

c) Personal Liabilities

It is stipulated that any person who contravenes or fails to comply with the regulations will be liable to the administrative monetary penalty.

In the event of the violation committed by a corporation, any of the corporation’s officers, directors, or persons exercising managerial or supervisory functions will be personally liable for the penalty if they “directed, authorized, assented to, acquiesced in or participated in the commission of the violation”.

d) No Due Diligence Defence

A person who is named in the violation can no longer use due diligence defence to exonerate them of this penalty. They cannot argue that they exercised due diligence to prevent the violations or they reasonably and honestly believed in the existence of facts that, if true, would exonerate them.

e) Public Naming of Violators

The Labour Program will make public the name of the employer, the details of the violation as well as the monetary amount imposed, once an employer has received an administrative monetary penalty. This could bring a substantial negative impact on the reputation of the employer.

The Review and Appeal Process

An employer who is found to be in violation of the Code can request a review of the penalty, the facts of the violation or both within thirty (30) days of receiving a notice of violation. They can make such a request to the Head of Compliance and Enforcement. The notice could be confirmed, amended or overturned. The employer could further appeal the review decision to the Canadian Industrial Relations Board (CIRB). The CIRB decision is final.

Federal regulated employers could face significant fines and risk tainting their reputations if they ignore the newly introduced administrative monetary penalties under the Code. These employers should be make sure that they have complied with the requirements of the Code.

If as a federally regulated employer, you have allegedly contravened the Code, Top Toronto employment lawyer, Stacey Ball can help you explore your legal options. Please contact our office at 416-921-7997 extension 227.